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Obamacare and Expats
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Guy Courchesne



Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City

PostPosted: Fri Jun 29, 2012 4:14 am    Post subject: Obamacare and Expats Reply with quote

American expats of course.

The healthcare act in the US mandates that everyone buy health insurance and was upheld by the supreme court today.

Does that include American citizens living abroad? I can't seem to find a definitive answer on it. It appears that the IRS is the agency to handle exemptions and application of penalties for not having coverage so what do you do if you live in Mexico?
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Tretyakovskii



Joined: 14 Aug 2009
Posts: 462
Location: Cancun, Mexico

PostPosted: Fri Jun 29, 2012 10:45 am    Post subject: Reply with quote

Thanks for thinking of that, Guy, I hadn't. Adds one more thing to my long to do list!
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Tretyakovskii



Joined: 14 Aug 2009
Posts: 462
Location: Cancun, Mexico

PostPosted: Fri Jun 29, 2012 1:43 pm    Post subject: Reply with quote

Here is one opinion, issued by the Council of Insurance Agents and Brokers.

Quote:
...the individual mandate provision exempts U.S. citizens living abroad. In addition, U.S. citizens living abroad will be ineligible to purchase coverage through any individual plan offered through an Exchange (see PPACA � 1312(f)(1)(A)(ii)).

That's close enough to an authoritative answer as I need, at the moment.

Since it's the IRS' job to enforce the mandate, and it's IRS that will come knocking, Guy's question was a good one, and needed an answer.
___________________

It's good to know where we stand in relation to this law, but do you notice how, once again, the laws are written in a way to penalize Americans who choose to live abroad? Wouldn't it have been nice if they'd written it in a way that we were exempt from the requirement, but had the option of participating voluntarily?

This fits the pattern represented by the way expats are dealt with under Medicare: there is no coverage for medical treatment received abroad. To take advantage of any benefits you may have coming under Medicare, you must travel to the U.S. for it.

A French citizen once told me that he had to pay 80 euros/year for extraterritorial benefits, a move that extended his full coverage, state sponsored medical insurance to where ever he chose to seek medical care. Wouldn't it be nice if we had that option, under Medicare?
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MotherF



Joined: 07 Jun 2010
Posts: 1450
Location: 17�48'N 97�46'W

PostPosted: Fri Jun 29, 2012 5:23 pm    Post subject: Reply with quote

Of course, if you are just in the country on a visit--and don't get sick or injured--no one will know if you have insurance or not. I always visited the US with no insurance in the past.

When I visited in 2008 for 3 and a half months, I didn't get insurance for myself--there was no affordable temporary option for that long. There are some companies that offer travel health insurance to the US, and most maxed out at 6 weeks, a few up to 90 days. After that it was buy 6 months of coverage not intended for a traveller. I was in a state that had a kids state health program for low income kids, so I did enroll them since my "income" more than qualified. But they never got sick or injured either.

I'm thinking about going for 3 to 6 months again next year. I've heard the new laws won't be fully in effect until 2014. I would really like to be able to pay into a low income plan for the time of that visit. I'm not as young as I used to be and off course don't want to leave my kids without coverage.
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boomerexpat



Joined: 15 Apr 2012
Posts: 135
Location: Mexico

PostPosted: Fri Jul 13, 2012 11:26 am    Post subject: Reply with quote

it is the same as taxes. If you are outside of the US at least 11 months of the year you don't have to deal with it.
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mejms



Joined: 04 Jan 2010
Posts: 390

PostPosted: Fri Jul 13, 2012 3:42 pm    Post subject: Reply with quote

boomerexpat wrote:
it is the same as taxes. If you are outside of the US at least 11 months of the year you don't have to deal with it.


That's not true at all with taxes. You're responsible for filing your tax returns even if you're outside of the US 365 days a year.
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Tretyakovskii



Joined: 14 Aug 2009
Posts: 462
Location: Cancun, Mexico

PostPosted: Mon Jul 16, 2012 11:51 am    Post subject: Reply with quote

Quote:
it is the same as taxes. If you are outside of the US at least 11 months of the year you don't have to deal with it.

A lot of people from the U.S. take comfort in this, or similar thoughts; but, as mejms pointed out, it's not the law.

Every citizen and resident of the U.S. is subject to the tax laws of the U.S., regardless of where they may live and work. How this impacts each one of them depends on their individual circumstances, including whether they have to file a return, and whether they have to pay taxes in the U.S. for a given tax year.

In my case for example, I have to file a return every year because my total income is above the threshold for filing and, if I have self-employment income in a given year, pay social security taxes in the U.S., because the exclusion for foreign earned income applies to income taxes, but not to social security taxes.
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Isla Guapa



Joined: 19 Apr 2010
Posts: 1520
Location: Mexico City o sea La Gran Manzana Mexicana

PostPosted: Mon Jul 16, 2012 4:07 pm    Post subject: Reply with quote

Tretyakovskii wrote:

In my case for example, I have to file a return every year because my total income is above the threshold for filing and, if I have self-employment income in a given year, pay social security taxes in the U.S., because the exclusion for foreign earned income applies to income taxes, but not to social security taxes.


How the US government would find out if an expat had not reported self-employment income, especially if it weren't a sizeable amount, let's say, under $5000US for the entire year?
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mejms



Joined: 04 Jan 2010
Posts: 390

PostPosted: Mon Jul 16, 2012 4:46 pm    Post subject: Reply with quote

Quote:
How the US government would find out if an expat had not reported self-employment income, especially if it weren't a sizeable amount, let's say, under $5000US for the entire year?


They most likely wouldn't. The only issue would be if you ever need your tax statements for any purpose.

Hacienda and IRS can be in contact, but not for small fish Wink

Quote:
In my case for example, I have to file a return every year because my total income is above the threshold for filing and, if I have self-employment income in a given year, pay social security taxes in the U.S., because the exclusion for foreign earned income applies to income taxes, but not to social security taxes.


So do you pay the self-employment tax of 15% of net income every year?
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Tretyakovskii



Joined: 14 Aug 2009
Posts: 462
Location: Cancun, Mexico

PostPosted: Mon Jul 16, 2012 5:27 pm    Post subject: Reply with quote

Quote:
So do you pay the self-employment tax of 15% of net income every year?

In any year that I have self-employment income, yes. In 2011, and so far this year, I've had no self-employment income.
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disraeli123



Joined: 12 May 2012
Posts: 143
Location: San Luis Potosi, Mexico

PostPosted: Wed Jul 18, 2012 3:48 am    Post subject: Don't worry about Obamacare it will die after the election.. Reply with quote

Thanks Guy for this thread, but no one will need to worry about Obamacare, because the Democrats will lose the presidency and the Senate. The latest polls are showing Romney beginning to pull away in Key states like Ohio, Florida, Virginia and Iowa etc... The people have had it with the constant attempts at taking away their freedom and the constant attempts to tax the people into the poor house. Obama is playing right into the hands of the republicans who will label him a tax and spend liberal without results. " Are you better off than you were 4 years ago" The answer for most people will be no their not better off their worse off.

I wouldn't be worried about Obamacare...
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BadBeagleBad



Joined: 23 Aug 2010
Posts: 1186
Location: 24.18105,-103.25185

PostPosted: Wed Jul 18, 2012 5:30 pm    Post subject: Reply with quote

Just out of curiosity why is it that Republicans hate the idea of universal health care? Every other First World country - and a lot of developing and 3rd World countries have it - why not the US. I just don't get it.
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Guy Courchesne



Joined: 10 Mar 2003
Posts: 9650
Location: Mexico City

PostPosted: Wed Jul 18, 2012 5:39 pm    Post subject: Reply with quote

Tretyakovskii wrote:
Quote:
it is the same as taxes. If you are outside of the US at least 11 months of the year you don't have to deal with it.

A lot of people from the U.S. take comfort in this, or similar thoughts; but, as mejms pointed out, it's not the law.

Every citizen and resident of the U.S. is subject to the tax laws of the U.S., regardless of where they may live and work. How this impacts each one of them depends on their individual circumstances, including whether they have to file a return, and whether they have to pay taxes in the U.S. for a given tax year.

In my case for example, I have to file a return every year because my total income is above the threshold for filing and, if I have self-employment income in a given year, pay social security taxes in the U.S., because the exclusion for foreign earned income applies to income taxes, but not to social security taxes.


My thoughts are with those that turn up in Mexico for 6 months or so to teach or take Spanish courses and file regularly back home. A lot of these folks are under 26 so I assume they stay under their parents' coverage if they live at home. If they are on their own, this is the group I think the law targets, in trying to get the young, healthy, and uninsured into the system to gather a larger pool of people paying into the system. What's the effect if you are in Mexico earning very little by US standards under these circumstances?
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Tretyakovskii



Joined: 14 Aug 2009
Posts: 462
Location: Cancun, Mexico

PostPosted: Wed Jul 18, 2012 5:54 pm    Post subject: Reply with quote

Guy I probably confused things by replying on the subject of US taxes (those comments you quoted from me)

Private health insurance coverage such as is required under Obamacare is another matter (as is who's going to win the US election!)

Topic drift is a fact of life on this forum it seems
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disraeli123



Joined: 12 May 2012
Posts: 143
Location: San Luis Potosi, Mexico

PostPosted: Thu Jul 19, 2012 5:22 am    Post subject: BBB the U.S. can't afford Universal Medicine. Trillion...... Reply with quote

Hello BBB, With a deficit at 1.35 trillion this year the U.S.can't afford Obamacare or Universal health care. You will never understand the American mind set we choose not to depend on government if we don't have to. Again I'm sorry for the topic so called drift, but why waste your time writing about a topic which will be a dead letter within less than 10 months. I know people probably think of me as the Grinch that stole Christmas, but most of the writing here on politics is so far off base when it comes to the states it is a little frightening how people on the forum do not even know the basics of the political system they are talking about or the general nature of the American electorate. You may think you know about the states, but your question about Universal healthcare shows that you do not grasp the individualist streak in the American political system and philosophy. I hope you and everyone enjoys watching the election as I said, before we will be going back to what the Founders intended and away from policies we really can't afford. This quote from John Adams may help you a little" The government that governs least governs best" or "The Power of the government must always be subordinate to the individual, because man will always try to use the power of government to get what he or she wants" Power and freedom were the topics more than 200 years ago and freedom and liberty for the individual was paramount not government power.
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